The Future Social Housing Provider, report for Flagship Housing Association

What will a typical English housing association look like in 10 years’ time? Will the plethora of small and medium-sized associations coalesce into a handful of mega-organisations? Will associations build more homes for private sale than for social rent?

The launch event in Norwich was attended by housing associations, local authorities and developers, most from East Anglia. Presentation of the report findings led to a lively discussion about

How to determine what tenants would need in the future;

Whether there was a relationship between innovation and size of housing association;

What was disrupting the market at the moment;

What kinds of partnerships and mergers worked well; and

How best to use modular housing.

Our report aimed to inform Flagship’s future strategy and suggest potential opportunities for the sector in general. We based our research on interviews with key stakeholders as well as a detailed review of recent literature, statistics and policy documents.

As we were carrying out our initial research, the tragic Grenfell Tower fire took place. Social housing was catapulted to the top of the political agenda, and the fire will have repercussions on the housing policy for years to come.

The context in which housing associations operate has been in flux for years. They aim to provide homes for those who need them, and historically this meant social rented housing. But in recent years many have broadened their offer, pushed by changes in the macro economic environment, demographic trends, housing policy, the welfare regime, and the organisation of the sector.

The larger associations almost all develop housing for market sale to cross-subsidise their social operations. While this may make good commercial sense, managers and boards need to remember that the core role of housing associations is a social one.

Many have merged to pool resources and capacity. Not all mergers have been successful; some were done for the wrong reasons and resulted in little benefit. Bigger associations are not always more efficient, and associations can achieve economies of scale through partnership or cooperation arrangements covering maintenance, letting and rent collection. Such arrangements don’t carry the financial and human costs of full merger but may bring equivalent benefits.

Some housing associations are now scaling back or eliminating certain services as the cost of provision increases—in particular social care.

Our report set out three economic and policy scenarios that will frame the future development of housing associations over the next ten years. We also asked where housing associations might be social or technical pioneers. Possible areas include increasing cooperation with public landowners to build developments that are mostly or entirely affordable; adopting modular construction techniques (including setting up their own factories); and exploiting digital and AI technologies such as self-driving cars.

The executive summary can be found here and click here for the full report.